Employee Ownership Quiz
How much has Southampton-based NewAge Industries seen its share price increase since installing an employee stock ownership plan (ESOP) in 2006?
Since installing an employee stock ownership plan (ESOP) in 2006, the company has watched its share price increase more than 850 percent. “Sales and profits have gone up greatly, retirement benefits for all employees have sky rocketed and we have changed the perception of ‘work,’” Ken Baker, CEO of NewAge, said. “Employees who have a piece of the action view their work very differently than employees who just punch the clock. Employees view all assets of the company as theirs and they take care of them as if it were their own, because they are. We have seen greater commitment and dedication to work and to the organization. Our employee turnover rate is below 10 percent.”
What is Meadville-based Voodoo Brewery’s turnover rate since installing an ESOP in 2016?
Since installing an ESOP in 2016, the company has virtually no turnover. It also has a built-in mechanism for an exit strategy for employees who do leave one day, while ensuring the company remains independent. “Having an ESOP is such an important part of the culture within Voodoo Brewing Company. Our employees have always had a sense of pride and ownership here just in the innate way we do things, however, the ESOP facet solidifies that even more. I can’t imagine running our business in any other structure and it has without a doubt contributed to how we have been able to accomplish so much in such a small amount of time while remaining independent and true to ourselves.,” Matteo Rachocki, Voodoo Brewing CEO said.
How much has revenue grown at Harrisburg-based HB McClure since installing an ESOP in 2010?
Since installing an ESOP in 2010, HB McClure’s revenue has grown by more than four times and its stock is up almost 1,500 percent. “The ESOP is the critical component of our success, culture, and is the cornerstone of commitment to our employee owners to provide an income that will sustain their standard of living in retirement when they spend a career with HB McClure,” company CEO Bob Whalen said.
What has employee growth looked like at Bellefonte-based Restek since becoming 100 percent employee owned in 2008?
Since becoming 100 percent employee owned at the end of 2008, Restek has more than doubled in size and its stock value has grown steadily year after year — to the direct benefit of its employees. “For Restek’s employees, the benefits of becoming an employee-owned business have been greater than we could have imagined. We work harder because we own our collective future, and our success and profitability reflect our efforts. For example, our success has allowed us to recently invest $4.5 million for a new wellness center, and our wellness programs and self-funded healthcare plan lower our medical costs and further boost our stock price. When Restek’s employees purchased our company, it was a long and challenging journey, despite our founders’ excitement and support, but it was worth it. It is exciting to see legislation that will make the road easier to travel for those who follow us,” Bryan Wolcott, President of Restek said.
How many employee-owned businesses are in Pennsylvania?
There are currently more than 285 employee-owned companies in Pennsylvania, employing more than 306,000 people. They include WaWa, Sheetz, Bradford White Water Heaters, and Voodoo Brewery. Nationally, 5,000 other companies have ESOPs.
How much do employees pay to become employee owned?
Formalized by Congress in 1974, workers pay nothing to participate—the company takes out a loan to buy the shares from the previous owner or shareholders, then divides the shares among the employees. Profits from the employee-owned portion of the company are tax-free, so the tax savings can be used to pay off the loan.
An ESOP company is most often run with a CEO and managers making day-to-day decisions
True! As co-owners of the company, employees vote on major events like mergers and spinoffs, but a management team still handles day-to-day decisions.
Most ESOP employees do not have 401(k)
False! 95% of ESOP companies offered 401(k) plans. In fact, employees at ESOP companies are more likely to have a 401(k) plan or other retirement plan when compared to non-ESOP companies.